Economic boon could be on horizon as drones evolve from military to civilian uses

In western Colorado, police have used small, pilotless aircraft to document crime scenes.

The same kinds of planes have taken to the skies in South Africa to pursue suspected poachers seeking rhino horns. They've been tested in England and South Africa to deliver pizza and beer.

One day, the technology could be used by courier services to transport packages. And movie sets might use it to film scenes that would normally require a helicopter.

In the aviation industry, they're called unmanned aircraft systems or UAS. But in everyday parlance, they're known as drones.

Recently a vital tool for the American military to spy, communicate and attack in places like Afghanistan, Pakistan and Yemen, drones may become a common sight in American skies within a few years.

Manufacturers see an economic windfall in the technology for everyday civilian uses ranging from policing and search and rescue to firefighting and even agriculture.

"You don't want to send somebody in there. Send one of these systems in there," said Steve Gitlin, vice president of marketing at Monrovia-based drone maker AeroVironment. "It's situational awareness. It's the ability to gain an airborne vantage point to see much more than what you can see from ground level.

Currently in the United States, the use of drones by, say, a sheriff's department is limited and requires Federal Aviation Administration permission on a case-by-case basis. But within five years, the FAA expects 10,000 drones could be roaming U.S. skies.

By Sept. 30, 2015, a congressional mandate calls for the FAA to incorporate drones into the national air space. That means FAA regulations would allow police and fire departments, private companies and other entities to use drones in civilian air space for nonmilitary purposes.

The potential economic benefits from the drone industry go beyond the mostly military programs of companies like AeroVironment, Northrop Grumman Corp., Lockheed Martin Corp., General Atomics and many others, which collectively employ thousands of people in Southern California working on unmanned aircraft.

The first three years after integrating drones into the national air space would see $13.6 billion in economic activity, including 34,000 new manufacturing jobs, according to a study by the Association for Unmanned Vehicles International, an Arlington, Va.-based trade group. Total new jobs, including workers ranging from grocery clerks to barbers who would benefit from the expected economic boom, would surpass 70,000 over three years, according to the study.

For every year that integration of drones is delayed, the U.S. economy will lose more than $10 billion in potential economic impact, or $27.6 million a day, according to the study.

"It's like any other technology boom -- GPS, the Internet," said Melanie Hinton, spokeswoman at the trade group. "I think as soon as people start seeing the positive effects, the growth in economics, how it will help people do their jobs safer and more efficiently, that it will go mainstream."

Among the 50 states, experts believe, California has the most to gain in economic benefit from the opening of the national air space for drones. Washington state is second and Texas third.

In the first three years, according to the trade association study, the Golden State would see $2.4 billion in increased economic activity, with more than 12,000 new jobs created. Over a decade, the economic activity would increase to $14.4 billion, including more than 18,000 new jobs.

The California economy is in a strong position to benefit from the civilian use of drones because of its robust existing aerospace and drone industry, as well as the state's huge agricultural sector.

Precision agriculture, which includes accurate surveying and spraying of crops, would likely be the top use for civilian-oriented drones, followed by public safety, the trade association study says.

Competition between states could be fierce. As the drone study noted, "States that create favorable regulatory and business environments for the industry and the technology will likely siphon jobs away from states that do not."

The competition for this new phase of the unmanned aircraft industry is already heating up. By the end of this year, the FAA is expected to designate six test sites for drones. About half the states are in the running to have a test site within their borders.

"Those states that are first designated as test sites will likely get a lead in getting the economic benefits," said Hinton of the trade association.

In January, Assemblyman Steve Fox, D-Palmdale, introduced a joint resolution designating California as a drone-testing area in hopes that this would help its chances in the FAA's selection process. The resolution passed the Assembly and awaits a vote in the Senate.

Sandra Kramer, Fox's press secretary, noted that Palmdale, like other parts of Southern California, has a large aerospace sector that would benefit from a growing drone industry.

"Clearly, drones are coming," Kramer said. "They're a part of our future and we've maintained that it would be better to be on the front end of the wave."

The competition will be fierce for this emerging civilian niche, even as nations around the globe increasingly depend on drones for military operations. Competition for military drones is already intense, as was evident at this year's Paris Air Show, which ends today, where aerospace companies showed off their pilotless technologies.

The global market for drones is currently at $11.3 billion, with that figure expected to rise to $140 billion in the next decade, according to the trade association's estimates.

Northrop Grumman, whose aerospace business is based in Redondo Beach, skipped the Paris Air Show this year in a cost-cutting move. However, the military contractor has a robust drone business that has contributed to U.S. efforts in Iraq and Afghanistan.

Northrop's best-known drone is the Global Hawk, an advanced surveillance plane that can do its job high enough and far enough away to be safe from enemy defenses. The plane also is able to stay in the sky nonstop for longer than a day, a feat beyond the ability of an aircraft with a pilot inside.

The Global Hawk is mostly used by the U.S. Air Force, though NASA and the National Oceanic and Atmospheric Administration use it for scientific research. The Global Hawk has even been used to take wildfire images that were used to help firefighters contain the blazes.

Manufacturing for the Global Hawk and other Northrop drones is done in Palmdale. Northrop splits its software work for drones between the South Bay and San Diego County, where the company's drone operations are headquartered.

Palmdale is also where Lockheed develops drone technologies, such as for its stealthy RQ-170 Sentinel.

General Atomics in San Diego makes the Predator drone, which the United States has used extensively in Afghanistan and other countries for surveillance and attacks against suspected militants. The U.S. Customs and Border Protection agency also uses Predators to patrol the U.S.-Mexico border.

AeroVironment designs, builds and tests its small drones in Simi Valley. The unmanned aircraft, small enough to fit in a backpack, are used mostly by the U.S. Army.

About 85 percent of all drones purchased by the Pentagon are made by AeroVironment, which, for example, sells three 4.5-pound Raven drones and two portable ground stations for $100,000 to $200,000. That compares with more than $100 million for one Global Hawk.

"The value proposition of these small systems is they can be deployed directly with the people who need the information they produce, just like a smartphone compared to a desktop computer," said Gitlin, the AeroVironment vice president. "One way to think about it is the squads out on patrol in dangerous areas, without the capability of a small unmanned aircraft system, there may not be any way for them to know what's on the other side of a hill or wall or ridge line."

AeroVironment's nearly 5-pound Raven, one of the drones in the Army's fleet, can fly for 90 minutes at a top speed of 45 knots.

"The UAS act as the 'Eyes of the Army' and support our soldiers and leaders by providing the capability to quickly collect, process, and distribute relevant information to the point of need," said Col. Grant A. Webb, who manages drone training at Fort Rucker, Ala.

"Additionally, the unmanned aircraft is ideally suited to perform dull, dirty and dangerous missions without direct risk to Army personnel engaged in the UAS operation while accomplishing the assigned mission."

"Eyes of the Army" refers to the military branch's strategic drone plan for 2010 to 2035, which lays out a plan in which drones ultimately "support the full range of military operations."

AeroVironment has developed a drone called Qube that is specifically made for police and rescue situations. The 5.5-pound craft with four propellers can fly or hover in the sky for 40 minutes.

The Ventura County Sheriff's Department has expressed interest in using Qube and even produced a YouTube video demonstrating how the drone can be used to find a lost hiker. A Ventura sheriff's spokesman could not be reached for comment.

While the aerospace industry has huge plans and expectations for drones, some observers question the technology's potential. "The golden age of drones is over," said Loren Thompson, an aerospace analyst at the Lexington Institute, an Arlington, Va., think tank. "If you're sitting at General Atomics thinking that demand is going to stay where it is, then you're living an illusion."

Thompson cited the end of the Iraq War and the Pentagon's drawing down in Afghanistan.

"The reason that drones will be in less demand in the future is that our enemies will have air defenses," he said. "Drones were very useful to fight the Taliban because they have no air defenses. But Iran, China and Syria do have air defenses. You put a predator over Syria and it is not coming back."

Two segments of the industry will continue to do well, predicted Thompson, who has served as a paid consultant for Lockheed. At the high end, he said, Northrop's Global Hawk and Lockheed's RQ-170 Sentinel "have a future because they can do things that most aircraft, whether they're manned or not, can't do."

Also promising is the low end of the market, where AeroVironment operates, because it offers "cheap drones that can do things quickly without costing much money," he said.

Thompson, who has challenged other popular notions in the aerospace industry -- such as questioning growth prospects at fast-rising Hawthorne rocket maker SpaceX, said he is not convinced drone makers will achieve the expected benefits from civilian markets.

"I understand that we can use drones to look for illegal migrants or to do police work or to do environmental surveillance, but couldn't you just use a helicopter to do that?" Thompson asked. "I think the industry wants to believe that drones are a big business that's here to stay but I'm skeptical."